April 2009

04/30/2009

The Government Car Service and its future was recently questioned by Ed Vaizey MP. The GCS provides the ministerial cars and their drivers that you see on the news whisking ministers to and from their many public engagements. There is no doubt that such cars make top people more efficient but it does cost almost £100K per car. You might accept the need for ten of these cars. You might even accept the need for fifty but the total is about 170.

The Government Car and Despatch Agency is structured as a Department of Transport Executive Agency and they publish separate figures. Their last Annual Report is here. In 2007/8 they had 171 cars and 168 drivers and they cost £14.0 million to run. That is about £82K per car but I guess that they don't have all the cars and the drivers on the road at the same time so they probably have nearer to 150 cars out there operating and the effective cost per car is slightly higher than £82K but probably not quite as much as £100K. They bought £1.0 million worth of new cars and employed five managers who earned over £50K in 2007/8. All employees are on civil service pensions.

It sounds like you could keep 50 odd cars for the really important people, lose 120 or so and save £10 million. They also have large premises at 46 Ponton Road in Vauxhall which would probably produce a nice capital receipt.

04/29/2009

The Standards Board for England is the body that keeps an eye on the behaviour of elected councillors, as if local papers, councillors of other parties and the electorate were incapable of doing this. You can read all about the Standards Board for England here.

In 2007/8 they spent £10.8 million employing 104 people to police councillors. In 2007/8 they received 3,547 allegations of misbehaviour but at the other end of the sausage machine only nine councillors were actually sanctioned. Indeed only 14% of all the cases that they see even warrant investigation. To spend more than a million Pounds a head to discipline people who have already been lampooned by their local papers, disciplined by their own councils, dealt with by the police and courts and not reselected to stand by their parties seems like a total waste of money. Our proposal is to simply dismantle the whole thing.

04/28/2009

Launched last October, you can read all about the Indian mission to the moon, Chandrayaan, at the website of the Indian Space Research Organisation here. Nuclear armed, militarily resurgent India is also a major beneficiary of British Aid. According to DFID’s glossy plan: “DFID will spend £825 million during the period 2008/9 to 2010/11”. That is £275 million per annum.

In the previous five year period DFID provided about £1,045 million to India in bilateral aid.

If India wants to prioritise military-industrial projects over social ones then we might conclude that that is a matter for them.

Today's idea is under active consideration by George Osborne according to The Times:

"The Shadow Chancellor and Liam Fox, the Shadow Defence Secretary, are in discussions over whether to include the A400M transport aircraft and the Future Strategic Tanker Aircraft (FTSA) programmes in a cuts package with potential savings of up to £3 billion, The Times has learnt. The £2.7 billion A400M is dogged by technical problems and is more than a year behind schedule. Abandoning the programme would endanger thousands of British jobs. But Mr Osborne is considering choosing cheaper existing aircraft instead of both the A400M and the FTSA as he searches for cuts to the defence project to be implemented under a Tory government."

04/24/2009

Star Chamber will return to individual ideas for cuts on Monday but in an article for The Independent, Liberal Democrat Treasury spokesman Vince Cable sets out his public spending cuts plan:

"The only way forward is to identify, explicitly, areas of government activity which will have to be cut right back. My party has already identified several specific cuts – like the ID card scheme; the NHS IT project; "baby bonds"; refusing unlimited taxpayer subsidies for nuclear power. We believe that there now has to be a serious debate about how to scale back the reach of tax credits; ballooning public sector pension commitments, especially to "fat cats" (like MPs); gross military overstretch; the promise of access to universities for half of all young people; and much else."

04/23/2009

The introduction of student loans reduced the burden of education on the state and allowed individuals far greater financial autonomy. However student loans are still subsidised by taxpayer to the tune of £1.2 billion a year (in addition to the tuition subsidy). There is no need for this support to continue - there is already a strong incentive for people to study, an earning premium of 77% over non-graduates. Indeed Reform’s Mobile Economy report showed that low income groups are more likely to study in countries with high fees and well developed loan systems than the UK. A removal of the subsidy will also help drive better education as when students make a greater financial contribution to their education they demand higher quality courses.

04/22/2009

The pay deals for NHS doctors agreed in the middle of this decade were a triumph for the British Medical Association but a disaster for the taxpayer.

The official NHS statistics show that consultants now earn nearly £120,000 on average compared to the £100,000 that they would have been paid under the old contract. Despite this, the Kings Fund has estimated that consultants’ productivity has fallen. Similarly, GPs’ income increased by 20% alone in 2004-05 when their new pay contract was introduced. The House of Commons Public Accounts Committee and Health Committee have condemned the introduction of the new GP contracts.

04/21/2009

In the public sector, a profligate spending culture has become pervasive. Civil servants’ wages continue to rise regardless of the performance of departments - Gordon Brown recently announced a 1.5 per cent rise for senior civil servants for 2009-10, while private sector organisations are introducing pay freezes. Departments (encouraged by Ministers) go on financial year-end spending binges to “use up” unspent money in order to secure commensurate funds the following year. Procurement is done by officials lacking the necessary commercial skills and behind closed doors, for example in defence. Many government departments have suffered from “mission creep” as eager civil servants look for new areas to involve themselves in.

Private sector companies such as Toyota are responding to the recession by imposing a four day week on staff to stave off job cuts. Civil servants should be asked to drop extraneous activity and do more for less. £2 billion could be saved in 2010-11 by imposing a four day week across the board with a commensurate 20 per cent wage cut.

04/20/2009

"Should a millionaire's child benefit be funded by a minimum wage cleaner working nights to put herself through college, or by someone struggling to pay the bills because he is caring for an ill wife and cannot work as many hours as previously?"

It is nonsense to argue that taxes should increase while the government continues to provide welfare to the well-off. Increasing taxes while providing welfare to high earners is a 'money go round', with the government taking from one hand to give to the other, incurring processing costs along the way.

A prime example of the money go round is universal Child Benefit which provides £20.00 a week for the eldest child in every family and £13.20 a week for all other children. Many countries have already removed or reformed their child benefits - most recently Ireland in the midst of their serious fiscal crisis. This has been motivated by the substantial cost of these benefits, with Child Benefit in the UK now accounting for around £11 billion a year.

I would not question that it is expensive to raise a child, or that as a society we do not want to see children condemned to a life of poverty. But separate benefits already exist that are means tested and targeted on those in need. And for better off parents, £13.20 a week for your second child is nice to have, but a drop in the ocean compared to the cost of housing, feeding, educating and entertaining the child for more than 18 years. And they could gain instead from other taxes not rising to fund the system.

Once the poorest are compensated with an increase in the means-tested child tax credit the saving would be £7.15 billion.